The TT cell line of human medullary thyroid carcinoma produces large quantities of calcitonin (CT) and calcitonin gene-related peptide (CGRP) mRNAs by alternative splicing of a primary CT gene transcript. We have previously shown that the relative levels of these mRNAs depend on the growth stages of the TT cells in culture and that these mRNAs can be increased acutely at the transcriptional level by phorbol esters (12-O-tetradecanoylphorbol-13-acetate) and the cyclic nucleotide, cyclic AMP. We show here that the naturally occurring fatty acid butyrate, unlike 12-O-tetradecanoylphorbol-13-acetate or cyclic AMP, has a delayed stimulatory effect on CT gene transcription, and also can modulate the posttranscriptional processing of RNA from this gene. Treatment of the TT cells with butyrate leads to a 5-fold increase in CT gene transcription after a lag period of 48 h and to a sustained decrease in the calcitonin gene-related peptide to CT mRNA ratio throughout the growth curve of these cells. In addition to its effects on CT gene expression, butyrate also decreases cellular proliferation and c-myc expression in the TT cells. These changes suggest that butyrate induces cultured human medullary thyroid carcinoma cells to acquire in vitro properties more consistent with the differentiated phenotype of the mature thyroid C-cell which is characterized by a low calcitonin gene-related peptide to CT ratio.